Real Estate’s Most Magnetic Cities

The real estate market is undergoing profound transformations, driven by shifting economic conditions, geopolitical uncertainties, and evolving societal needs. Insights from PwC-ULI’s Emerging Trends in Real Estate: Europe 2025 and Kearney’s Global Cities Report 2024 reveal the trends, sectors, and cities poised to lead the way in the year ahead.

by Ersun Bayraktaroğlu

The past year has been defined by central banks raising rates in a coordinated effort to keep inflation under control, putting strain on mortgage-dependent property buyers. The European Central Bank (ECB) has seen its main refinancing rate climb to 4.25%, a stark contrast to the near-zero rates of recent years. Yet luxury buyers, especially in Europe, appear remarkably unperturbed. In cities such as Paris and Milan, culture plays a unique role: the romance of owning a pied-à-terre near the Louvre or an apartment with a view of the Duomo doesn’t simply provide a roof—it offers a connection to history.

This year’s Emerging Trends in Real Estate (ETRE) report comes under the motto, “Charting New Horizons”, reflecting a market moving cautiously forward. According to the report, Europe’s real estate leaders are drawing some comfort from a more benign interest rate environment than in previous years, yet sentiment remains clouded by fragile economic growth and growing geopolitical uncertainty. When it comes to “geopolitics” everyone maintains a cautious view. This leads, generally, to a more nuanced view of the market, where there are cautions at every turn. So, compared to last year, although the general sentiment is positive, the report said there was an environment of “cautious optimism”.

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Explore Ersun Bayraktaroğlu ’s insights in the first issue of Centre Mag.